More for Les with UPN
Eye prexy Moonves to head netlet; McCluggage ankles
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Viacom announced Monday that its money-losing weblet, UPN, will be shifted next month from the Kerry McCluggage-led Paramount Television Group to Moonves-controlled CBS Television.
The decision by Viacom prexy and chief operating officer Mel Karmazin prompted 10-year Par vet McCluggage to resign, citing a clause in his contract stipulating UPN must report to him.
UPN chairman Dean Valentine remains in his post, though most observers doubt he'll stay once his contract expires next September; he'll likely be gone even sooner. Network chief operating officer Adam Ware may also be on shaky ground, though exec has proved his survival skills and could be valuable on affil issues.
McCluggage's other responsibilities -- including primetime supplier Paramount Network Television, as well as the company's international and syndie units -- will continue to fall under the Par TV Group banner, reporting to Viacom Entertainment Group chairman Jonathan Dolgen.
The consolidation of CBS and UPN had been considered an eventuality since the Eye joined the Viacom fold two years ago. McCluggage and Dolgen had been opposed to such a move.
Karmazin finally acted, according to Viacom insiders, after it became clear that UPN -- while stronger programming-wise than it's been in years -- was not much closer to profitability than it had been two years ago. With UPN's overall losses just shy of $1 billion, including nearly $100 million this year thanks to the costly acquisition of "Buffy the Vampire Slayer," the red ink seemed certain to continue in 2002.
With the restructuring, it's now expected that CBS will handle ad sales for both the Eye and UPN. Other areas will be consolidated, and layoffs are likely-- though with only 110 staffers at UPN, it likely won't be a bloodbath.
Some Viacom insiders question just how much money will be saved by the moves or whether combining the ad sales departments of the vastly dissimilar UPN and CBS will result in much more ad coin. Indeed, Viacom topper Sumner Redstone, in an interview published last month, said the "amount of cost savings has been overstated."
Still, "Mel wouldn't have made the move if he didn't think there was a financial benefit for the company," one insider said. "Whether he's right is another question."
While Dolgen remained protective of McCluggage, he ultimately signed off on the move. "It's a decision I support," he told Daily Variety. "Kerry has a different set of needs and desires … and I'm sorry (he) is leaving." Viacom insiders also play down reports of a Redstone/Karmazin split on the issue.
Dolgen said what's most important is that UPN has become an asset for Viacom rather than a liability. He credited McCluggage for that turnaround.
"Nobody asks anymore whether UPN will exist," he said. "They only ask who's going to run it."
Moonves, currently basking in the glow of the Eye's November sweeps win in total viewers and the net's continued move toward a younger aud profile, clearly emerges as the big winner of Karmazin's decision. The CBS topper is now the first person ever to control two broadcast networks; Turner chief Jamie Kellner has oversight of weblet WB and the Turner cable nets.
Hold the congrats?
But Moonves is also inheriting lots of heartache.
Despite UPN's primetime ratings uptick this season, the netlet still bleeds money, pulling in far less ad revenue than its closest competitor, the WB. What's more, UPN still struggles to attract top-name producers.
In addition, a good chunk of UPN's Nielsen gains can be chalked up to Thursday wrestling, but the WWF --not UPN -- sells ad time for that franchise. And while its Monday urban laffers also are doing well, the shows' demos aren't the most upscale.
"People say congratulations to me, and I say, 'I think,' " Moonves quipped.
Exec said he believes UPN is headed in the right direction creatively, but that many other problems need to be fixed.
"Programming-wise, their schedule makes sense," he said. "But there's work to be done. This is about continuing what's been started. When you run a network, it's all about making sure your ad dollars cover your programming costs."
Moonves, who was in New York Monday, had not yet talked to any UPN execs, but said he plans to travel to the netlet's Santa Monica headquarters soon. "They've got a lot of good people over there, and I'm looking forward to getting to know them," he said.
Moonves did not mention any specific names, and curiously, the Viacom press release announcing the new structure did not mention Valentine at all. The UPN exec is suing his bosses, claiming he's owed bonuses.
Most industry observers used phrases such as "inevitable" and "foregone conclusion" to describe the restructuring. Others wondered why Viacom didn't put the entire Par TV Group under Moonves.
Moonves might not need formal oversight of the studio, however. Whoever replaces McCluggage -- be it one exec or several -- will need to have good relations with the Eye topper.
"The question anyone who wants (the McCluggage job) should ask is, 'Do I interview at Melrose or Beverly,' " one veteran agent said, referring to the locations of Par and CBS, respectively.
Potential replacements
Eric Tannenbaum, the former Sony exec currently overseeing the dismantling of Artists Television Group, was at the top of numerous speculative lists of candidates to replace either McCluggage or Valentine, though most assume he'd best fit at UPN.
Dolgen said he hopes to decide within a month how to replace McCluggage. The fate of Par Network TV topper Garry Hart remains uncertain.
Big Ticket Television topper Larry Lyttle, whose company falls under the Par banner, is being mentioned as a candidate to take on more responsibilities within Par; ditto syndie program chief Greg Meidel. Agents and studio insiders also mentioned the usual list of exec suspects: Former Par and Sony exec Tom Mazza; former Sony exec Len Grossi; and outgoing ICM worldwide TV topper Bob Sanitsky.
It's also possible Dolgen will temporarily take over day-to-day control of some units.
Culmination of merger
Karmazin said Monday's announcement will help Viacom "simultaneously realize significant efficiencies and increase advertising sales, while we build on UPN's track record of bringing distinctive and successful programming to the screen."
McCluggage declined to comment on the reason for his departure, instead issuing a statement saying he's "really enjoyed the past 10 years here at Paramount." Those familiar with the reason behind his decision, however, said it was based solely on Viacom's move to put UPN under CBS control.
Exec came to Par in 1991, recruited by then-Par topper Brandon Tartikoff. He had previously been prexy of Universal Television and a producer on "Miami Vice." It's likely McCluggage may go back to his production roots; he has the option of setting up a company at Par if he wants.
Many around town Monday praised McCluggage for being a champion of scribes and producers who stood up for the creative process vs. network bean counters. Others said he was simply "too old school" and had "an inability to compromise."
During his 10-year run at Par, McCluggage extended the "Cheers" franchise via "Frasier," helped "JAG" turn into a hit for CBS and kept the "Star Trek" franchise solid on the small screen.
But while McCluggage had a number of "singles and doubles," as one agent put it, new franchises haven't been plentiful.
"He didn't have a lot of new home runs," the agent said.
